Tesla to lay-off 9 Percent of Workforce as it eyes its first Profits Later this Year

The US-based electric car maker, Tesla, on Tuesday revealed that it is embarking on a restructuring move to resize its workforce. The company’s CEO Elon Musk said in an email circulated through its networks globally that it would lay off 9 percent of its workers, especially those in the white color office-based jobs.

Musk attributed the prospected move to the major growths that the company has experienced in the past few years, a growth that has led to duplication of roles and responsibilities in the workplace. He added that the strategic direction that the company is taking at the moment demands it to take the restructuring move in order to save on costs while eliminating redundancies in the workplace.

The company, which has over 40,000 employees, could see over 3,000 of them retrenched. Although the CEO did not attribute the changes to the need to save the company’s image regarding profit-making, he said in the emails and a follow-up tweetthat Tesla was in the process of flattening its management structures in order to streamline corporate communication. Since its inception and start of operations and production, the company is yet to net any profits, something that has in the past been reviewed as a negative trend of the company, one that may ward off investors.

Musk has in the recent past been struggling to keep alive his position as the chairman of Tesla. Last week, shareholders made attempts to replace his positionin the company, a move that he managed to survive. The CEO has been categorically slow in pushing for profits in the past but hinted earlier this month that the company would see significant boosts in production and sales of its Model 3 by the end of this month even as he eyes net profits in the last two quarters of the year.

The current retrenchment plan that the company is undertaking comes after last year’s firing of underperforming workers who scored negative reviews. The company also intends to terminate its partnership deal with Home Depot that offers a platform for Tesla to sell multiple of its products such as solar panels and solar batteries.

Analysts weighing-in on the move say that the company is in due pressure to show profits. Michelle Krebs, an analyst for Autotrader, attributed automobile maker may be experiencing unprecedented pressure to deliver according to shareholder expectations, therefore prompting it to increase production while cutting on costs.

After news of the intended lay-off spread in the US on Tuesday afternoon, the company’s New York-listed stock fell slightly from 7 percent to close at 3.2 percent.